8 July 2013
The recession has thrown business costs into stark relief, and while pay freezes have been the norm for the past few years, FDs, in particular, are recognising the value of employee benefits as a key strand of their staff recruitment and retention strategies.
By offering benefits, such as private medical insurance or gym membership, employers can build a happier, healthier, and more productive workforce. However, just offering great employee benefits isn’t enough to promote wellbeing and financial security at work. You need to actually tell staff what’s available. For example, Income Protection isn’t generally well understood by the average employee, so they don’t value it. But, when explained and understood properly, it becomes much more valued and attractive.
Why talking about staff benefits matters
Earlier in the year, research from Cass Business School, part of City University, showed that while today’s workforce is older and includes more women and disabled workers than it did 30 years ago, employee benefits have failed to keep pace. The second phase of our research, Money Talks: Communicating Employee Benefits has looked at the advantages of communicating with staff about the benefits. And, it’s startling to see just how many organisations are failing to communicate their benefits packages to staff, and so aren’t getting a return on their (not insignificant) investment.
This ‘communications chasm’ between what employers offer and what employees think they are entitled to is driving up sickness absence rates and staff turnover. This costs a typical business with 1,000 employees £470,000 more than a business with similar benefits that has good communications practices in place. And the ‘chasm’ exists for managers as well as non-management staff, as well as for women with dependent children, despite the expectation that such benefits – particularly those relating to flexible working – would be specifically targeted at this group.
Better informed employees are more loyal employees
There’s a mistaken belief that if employees are aware of benefits – such as private health insurance or Income Protection – they are likely to take more time off sick. Cass’ research disproves this theory, showing that communicating about a wide range of employee benefits actually builds employee engagement and a more loyal workforce that takes less time off sick.
The worst culprits
As you might expect, non-union workplaces that offer good benefits aren’t good at telling staff about them. But, perhaps more surprisingly, SMEs with fewer than 50 employees – who, due to their size, you might expect to be good at communicating benefits – have the poorest communications practices.
And, US-owned workplaces tend to offer good benefits and tell their staff about them, whereas UK and EU-owned workplaces may offer good benefits, but their staff are none the wiser.
The time is ripe to take a fresh look at the benefits you offer – and how you tell staff about them. A good benefits package, communicated well, can help to manage –and reduce –bottom line costs, and help to build a loyal and more productive workforce.
Money Talks: Communicating Staff Benefits: An infographic by the team at Unum UK